Granted political asylum Aug. 16, 2012 in Equador’s London embassy, WikiLeaks founder Australia-born computer hacker Julian Assanage can only cringe watching the world’s largest hack of Panamanian law firm Mossack Fonseco in what’s known as “Panama Papers.” Hacked for some 11.5 million documents exposing secret offshore banking transactions for such high profile world leaders as Russian President Vladimir Putin and Ukrainian President Petro Poroshenko, the revelations sent shockwaves through celebrity and political circles. Relatives of prime ministers of Great Britain, Iceland and Pakistan were also implicated in what should come as no surprise to anyone. Secret Swiss bank accounts and, more recently, offshore accounts in the Caribbean islands, most notably the Caymans, embarrassed 69-year-old 2012 GOP nominee Mitt Romney when he ran for president.
When former Egyptian President Hosni Mubarak was chased from office Feb. 11, 2011 at the height of the “Arab Spring,” he reportedly had some $60 billion parked in offshore accounts. How much money-laundering and corrupting involves some of the world’s most powerful leaders is anyone’s guess. Yesterday’s revelation about the Mossack Fonseco hack sent chills up the spines of countless celebrities, heads-of-states and their families. Implicating Panama in money laundering and hiding assets raises disturbing questions about Central America, Caribbean Islands and other unnamed tax havens. “I may be the first top official in Ukraine who treats declaring assets, paying taxes and conflict of interest issues profoundly and seriously, in full compliance with Ukrainian and international law,” said Poroshenko, defending himself against potentially career-ending charges.
Poroshenko can talk all he wants about the legality of offshore accounts but it doesn’t pass the smell-test for the man who promised to clean up Ukraine’s corruption. Taking over from Kremlin-backed Viktor Yanukovich June 7, 2014, Poroshenko claimed he was above board, after railing against past corruption. “Having become president I stopped participating in the management of my assets, having delegated this responsibility to the respective consulting and law firms,” insisted Poroshenko, while Ukrainian legislators called for his impeachment. Radical Party Leader Oleg Lyashko said he “initiated the start of impeachment proceedings,” questioning the legality of Poroshenko setting up tax shelters while president. Since Poroshenko took office, all the promises of the Feb. 22, 2014 pro-Western coup have vanished, leaving Ukraine in financial ruin.
Admitting they’ve set up more than 240,000 offshore companies, Panama-based Mossack Fonseca defended their work as legal. Putin blamed the “Panama Papers” on his enemies trying to smear his name before new presidential elections. Mossack Fonesca’s files go back 40 years, not surprising that offshore tax evasion and money laundering is routine among rich politicians and celebrities. Kremlin officials dismissed the findings as political witch-hunt. “I think the least will proved to be the biggest blow the offshore would has ever taken because of the extent of the documents,” said International Consortium of Investigative Journalists [ICU] director Gerard Pyule. Calling the findings “nothing concrete and nothing new,” Putin already distanced himself from the revelations. U.K. Prime Minister David Cameron called his late father’s offshore accounts a “private matter.”
Iceland’s Prime Minister Sigmundur Gunniaugsson was named in a secret offshore tax haven, prompting calls by the opposition for his resignation. “I certainly won’t [resign] because what we’ve seen is the fact that, well, my wife has always paid her taxes. We’ve also seen that she has avoided any conflict of interest by investing in Icelandic companies at the time that I’m in politics,” said Gunniaugsson, not denying that he’s put personal assets in offshore accounts. Embarrassing U.K. Prime Minister David Cameron, the HM Revenue and Customs Minster Jennie Granger promised to look into Cameron’s offshore activities. Cameron’s spokeswoman Gabby Bertin said any of Cameron’s offshore investments in the Bahamas was a “private matter.” Opposition Labor Party’s finance spokesman John McDonnell called Cameron’s offshore investments “morally unacceptable.”
Blowing the cover of world leaders and celebrities, revelations about Panama’s Mossack Fonseca’s offshore tax shelters should come as no surprise. Paris-based Organization for Economic Cooperation and Development criticized Panama for what looked like backdoor financial deals. Meeting at the G20 in Antalya, Turkey Dec. 15, 2015, the OECD warned finance ministers about Panama’s off shore shenanigans. “The consequences of Panama’s failure to meet the international tax transparency standards are now out there and in full public view,” OECD Secretary General Angel Guria said in a written statement. World leaders dealing with struggling economies, especially in places like Russia and Ukraine, find themselves embarrassed. Countries like Panama, promising to clean up its financial house, have a lot of explaining to do, accounting for Mossack Fonseca’s 240,000 tax shelter transactions.
